Skip to main content

A First Look at the World Energy Outlook

The International Energy Agency released its key annual report, World Energy Outlook, today and in it, makes a number of striking forecasts about the profile of energy.

And forecast is the right word – the IEA takes the pulse of energy markets as they stand today and projects them out to about 2035. These are not Nostradamus-like predictions of the future. The forecasts vary in detail from year to year, but are useful to policymakers and to those interested in energy-related issues.

This year, the IEA report has stirred some controversy.

In an indication how “fracking” is reshaping the global energy picture, the International Energy Agency today projected that the United States will overtake Saudi Arabia as the world’s largest oil producer by 2017.

And within just three years, the United States will unseat Russia as the largest producer of natural gas.

The response to this assertion has been mixed. Rob Wile at Business Insider polled his sources and found a decided lack of support:

But Manuj Nikhanj, the lead oil play analyst at research firm ITG, emailed us to there is no way that output alone would be able to meet U.S. demand, which already stands at 19 million barrels per day:

Do they mean energy independence on a million BTU basis including natural gas? The US consumes 19 million barrels of oil per day, so not sure how you become independent with less than 10 million barrels per day of production (based on the media chart they put out).

Nikhanj speculates that Canadian oil may fill the gap, but the IEA does not make that clear.

Another analysts dismisses this idea:

David McColl, who covers oil and gas stocks for Morningstar, emailed us to say Canada wouldn't be able to fill the gap either:

Consider Canada - on its own it isn’t likely to meet those needs, and they may be exporting more significant volumes overseas by 2020 as well. This means some U.S. refineries will still be relying on oil imports, which will likely be priced to international markets.

Bold in original. Even if the IEA has been exceptionally optimistic in its assessment, the U.S. is becoming more energy independent. That part isn’t in dispute. And remember – these forecasts are not meant to be predictive.

---

And nuclear energy? Glad you asked:

“Our projections for growth in installed nuclear capacity are lower than in last year’s Outlook and, while nuclear output still grows in absolute terms (driven by expanded generation in China, Korea, India and Russia), its share in the global electricity mix falls slightly over time,” a trend likely to drive up the fossil fuel import bills and make it harder to meet emissions reduction targets aimed at slowing climate change.

This is especially true of Japan and Germany. Nuclear energy will still play a role in Japan but not Germany, which wants to move to renewable energy sources. Until it can do that, it will depend on its plentiful coal supply. As the report points out, this does carbon emission reduction goals no good.

A little more about the atom (really, the same thing put a little differently):

Although some OECD countries, particularly Germany and Japan, are cutting back on nuclear power in the wake of the 2011 accident at Japan’s Fukushima Daiichi nuclear plant, nuclear power is still expected to account for 12 percent of global electricity generation by 2035, thanks to increased use of nuclear power in China, Korea and Russia.

This is based on what IEA sees happening today – that 12 percent can grow (and hopefully not shrink) in subsequent forecasts – there are enough countries with nascent industries to suggest future growth.

---

The IEA is starkly negative about the world’s response to climate change:

“Taking all new developments and policies into account, the world is still failing to put the global energy system onto a more sustainable path. Global energy demand grows by more than one-third over the period to 2035 in the New Policies Scenario (our central scenario), with China, India and the Middle East accounting for 60% of the increase,” the report said.

Scenarios are projections based on different assumptions. The New Policies Scenario, for example, flows from policies in place today. Other scenarios make different assumptions, notably different energy mixes - for example, greater use of nuclear energy with all other assumptions left the same. These can be interesting in that they can show better or worse outcomes that policymakers can pursue (or avoid). The base scenario is fairly direct – if nuclear energy capacity doesn’t grow, carbon emission goals become harder to reach.

---

You can visit the IEA yourself to get an idea of the organization’s work, but not to read the report – unless you want to pony up the 120 euro for the pdf. I’m basing this first look on published stories, but I expect to see the outlook itself soon – I know I’m interested in looking at the different scenarios and will post on them here.

Comments

Popular posts from this blog

Making Clouds for a Living

Donell Banks works at Southern Nuclear’s Plant Vogtle units 3 and 4 as a shift supervisor in Operations, but is in the process of transitioning to his newly appointed role as the daily work controls manager. He has been in the nuclear energy industry for about 11 years.

I love what I do because I have the unique opportunity to help shape the direction and influence the culture for the future of nuclear power in the United States. Every single day presents a new challenge, but I wouldn't have it any other way. As a shift supervisor, I was primarily responsible for managing the development of procedures and programs to support operation of the first new nuclear units in the United States in more than 30 years. As the daily work controls manager, I will be responsible for oversight of the execution and scheduling of daily work to ensure organizational readiness to operate the new units.

I envision a nuclear energy industry that leverages the technology of today to improve efficiency…

Nuclear: Energy for All Political Seasons

The electoral college will soon confirm a surprise election result, Donald Trump. However, in the electricity world, there are fewer surprises – physics and economics will continue to apply, and Republicans and Democrats are going to find a lot to like about nuclear energy over the next four years.

In a Trump administration, the carbon conversation is going to be less prominent. But the nuclear value proposition is still there. We bring steady jobs to rural areas, including in the Rust Belt, which put Donald Trump in office. Nuclear plants keep the surrounding communities vibrant.

We hold down electricity costs for the whole economy. We provide energy diversity, reducing the risk of disruption. We are a critical part of America’s industrial infrastructure, and the importance of infrastructure is something that President-Elect Trump has stressed.

One of our infrastructure challenges is natural gas pipelines, which have gotten more congested as extremely low gas prices have pulled m…

Innovation Fuels the Nuclear Legacy: Southern Nuclear Employees Share Their Stories

Blake Bolt and Sharimar Colon are excited about nuclear energy. Each works at Southern Nuclear Co. and sees firsthand how their ingenuity powers the nation’s largest supply of clean energy. For Powered by Our People, they shared their stories of advocacy, innovation in the workplace and efforts to promote efficiency. Their passion for nuclear energy casts a bright future for the industry.

Blake Bolt has worked in the nuclear industry for six years and is currently the work week manager at Hatch Nuclear Plant in Georgia. He takes pride in an industry he might one day pass on to his children.

What is your job and why do you enjoy doing it?
As a Work Week Manager at Plant Hatch, my primary responsibility is to ensure nuclear safety and manage the risk associated with work by planning, scheduling, preparing and executing work to maximize the availability and reliability of station equipment and systems. I love my job because it enables me to work directly with every department on the plant…